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Updated 3 days ago on . Most recent reply
Leveraging equity on my first deal
This is my first investment and need help understanding how to leverage my equity for more doors.
Last november (2024) i bought 3 connected properties in a neighborhood going through a renaissance. The purchase price including closing costs was ~$33,000 for all 3 lots together. One has a house (built 1911 870sq/ft) that i have been renovating. Up until now i have been using a private investor’s capital who wanted to see me get started in RE. Currently ive used 52,000 of his money. I am getting a construction loan ($60,000 at 6.5% interest only first 12 months) to finish the rest of the house to get turn key ready. All in all i will have $98-$105k invested in this house (52k from investor and rest from loan). The house has appraised for a finished value of $155k. Is there a way i can pay my private investor back (he only wants what he put in) and still have capital to put a downpayment on a modular house to place on one of the other properties?
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#5 All Forums Contributor
- Rental Property Investor
- Detroit, MI
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#5 All Forums Contributor
- Rental Property Investor
- Detroit, MI
You're doing everything right --bought low, added value, and now you're sitting on solid equity. Once that house is finished and rented, a cash-out refinance or DSCR loan can help you:
Pay back your private investor
Clear your construction loan
Unlock ~$10K+ in capital to put toward your next project
If the numbers pencil out, that next project could be a turnkey rental property in the Midwest or Southeast--think places like Indianapolis, Birmingham, or Memphis, where $25–40K down gets you a renovated, rent ready single-family with property management in place and potential cash flow from day one.
Leverage that equity wisely, and you could go from 1 door to 3+ this year without touching much more of your own cash. You're playing the game the right way. Keep going!
Always here to run numbers or talk about markets!
Best of luck,
Melissa